About Bramwell Bate Lawyers

Bramwell Bate specialises in providing corporate and commercial legal services to a broad range of businesses throughout Hawke’s Bay. The team can also advise on buying and selling property, estate planning and trusts, relationship property and family law, among others. Our team’s skills are diverse and we have the expertise to assist with all your legal requirements. Visit us at www.bramwellbate.co.nz

Is 2024 the year of the work life balance?

With an ever-changing market, it’s time for employers to embrace changes in the status quo and actively recruit employees for part- time, fixed term, and casual roles. The options There are opportunities for an employer to promote flexibility for employees who are looking to return to the workforce or move away from the 9 to 5. An employer can consider recruiting for part-time, fixed term, and casual roles.

These positions allow employers to access a larger demographic of potential employees, who for various reasons may not be able to commit to full-time traditional hours of work.

Your responsibilities

There are standards to uphold when you offer an employment contract to a new employee.

Some of the terms vary dependent on the position, specifically the entitlement to annual leave, sick leave and bereavement leave. At minimum, you must provide a written employment agreement including:

  • The names of the employer and employee.
  • A description of the work to be performed, an indication of the place of work, and an indication of the hours of work.
  • The wage or salary rate, and how it will be paid. Employees over 16 must be paid minimum wage.
  • An explanation of how to resolve employment relationship problems.
  • An explanation of public holidays, annual leave, sick leave, and bereavement leave.
  • An explanation of family violence protections, and parental leave.
  • A statement regarding rest and meal breaks (dependant on hours worked).
  • Any other matters that are agreed on (including a potential trial period).

Part-time

A part-time role is generally less than 30 hours per week. This is ideal for employers who have roles available that do not necessarily require 40 hours a week.

In the age of a thriving social media presence, hospitality and retail businesses are actively promoting sales and events on apps such as Instagram or TikTok. To do this effectively, many businesses hire a ‘social media manager’ in a part time role. Another example are hospitality businesses who only need extra staff for busy nights of the week. Part-time roles are an economical way to manage gaps in staffing and reduce the risk of turnover in employees.

There are struggles in hiring part-time workers, but these can be managed by effective leadership and communication. It may be difficult to build a team culture and strong relationships, and other workers may struggle to understand the reasoning and benefits of variable roles. Regular work social events, ensuring everyone knows each other’s roles and responsibilities, and that they are a valued part of the team may be a way to counteract this.

Fixed-term

Fixed-term employment is encouraged in situations where there is a specified end date. Examples include cover of parental leave, a new project, or seasonal work. This must be a genuine fixed-term position, not a pretence for a probationary period. These terms must be written in the employment agreement. Benefits of this position allow you to employ workers for a fixed amount
of time and bring them onboard for a specific job. For example, the horticulture sector in Hawke’s Bay is substantial, so fixed term employment for seasonal work is ideal.

Economically this is beneficial, however it can be a challenge to build a tight-knit team culture when your employees have a fixed end date with the company, so it is important to keep this in mind.

Casual

Casual workers have no expectation of work, no regular pattern, and no guaranteed hours. This is ideal for employers who are looking to manage unexpected or unplanned surges in work (an example being a Christmas holiday period). As soon as a casual worker enters a regular pattern of work with regular hours, their position will become permanent, and your obligations regarding annual leave, sick leave, and bereavement leave will change. Casual workers will typically not have the same loyalty to your business, and this may be a stepping stone for some employees whilst they look for their next role. This is not a cost-effective option if you spend significant time and effort onboarding them.

The answer

To ensure your business is running at its most efficient, an employer must recognise the benefits of flexible employment arrangements and how they can best be incorporated. Ensure you are mindful of your responsibilities and be proactive when onboarding new employees.

About Christine Symes

Christine is the Managing Director of Bramwell Bate. Born and raised on a farm in Southland, Christine graduated from the University of Otago in 2000 with a Bachelor of Laws and a Bachelor of Commerce. After working in law firms in Napier and Dannevirke, Christine joined Bramwell Bate in 2020. Her areas of expertise include conveyancing and property law, company and commercial law, Trusts, estates and succession planning. Outside of work, Christine enjoys the Hawke’s Bay lifestyle with her husband and three sons.

Exploring the opportunities and risks of AI in business from a legal perspective

Artificial Intelligence (AI) has emerged as a transformative force in the business world, offering newfound opportunities for efficiency, innovation, and competitive advantage. However, along with these opportunities come legal implications and risks that must be carefully navigated.

AI algorithms can process vast amounts of data quickly and accurately, helping businesses identify trends, predict future outcomes, and make informed choices. This can lead to a more transparent and defensible decision-making processes.

AI technologies can automate routine tasks and processes, reducing the need for human labour and, consequently, labour-related costs. This cost reduction can translate into higher profits and increased competitiveness.

However, it’s crucial to consider the legal implications of workforce changes, such as potential labour disputes and employment law compliance. How often have you been on a webpage when a virtual assistant asks if there is anything they can help with? AI-powered chatbots and virtual assistants can provide round-the-clock customer support, enhancing the overall customer experience.

Moreover, AI-driven personalization can tailor products and services to individual customer preferences, boosting customer satisfaction and loyalty. Before releasing this functionality on your website, it is crucial to ensure the privacy and security of customer data remains paramount. Legal frameworks, such as the General Data Protection Regulation (GDPR) in Europe, require strict adherence to data protection principles. Failure to comply with these regulations can lead to significant fines and reputational damage.

The update to the Privacy Act in 2020 brought NZ law slightly closer to the European framework, and there are now 13 privacy principals to comply with. AI can help businesses identify and protect their intellectual property more effectively.

Machine learning algorithms can monitor the internet for potential trademark infringements, patent violations and can assist with copyright management and content protection. While AI can help protect intellectual property, it can also pose challenges related to patent eligibility. Courts around the world are still grappling with the question of whether AI-generated inventions can be patented, and these legal uncertainties can impact businesses’ innovation strategies.

For the benefit of many local business in the agricultural and horticultural sector, AI-powered predictive maintenance systems can monitor machinery and equipment in real-time, anticipating maintenance needs and preventing costly breakdowns. While this can result in substantial cost savings, businesses must consider health and safety compliance in the event of a malfunction or failure. AI applications in regulated industries must adhere to strict requirements.

Ensuring compliance with health and safety regulations or consumer protection laws, is essential to avoid legal penalties and reputational damage. AI algorithms are only as good as the data they are trained on, and biased data can result in discriminatory outcomes. Businesses that deploy AI systems must be vigilant in identifying and mitigating bias particularly in areas like hiring, lending, and criminal justice.

There have been many instances of AI bias around the globe – Amazon’s recruitment algorithm reflected a male dominant workforce; Twitter’s algorithm favoured white faces over all others when cropping pictures and closer to home the NZ Police decided to stop the use of their road policing algorithm after being warned against the system by an expert panel.

Determining liability in cases involving AI can be challenging. If an AI makes a faulty decision that causes harm, who is responsible—the developer, the user, or the AI itself? As is the case with many innovations, laws and regulations are often made reactively. AI presents a world of opportunities for businesses however, these opportunities are accompanied by legal risks and challenges that cannot be ignored.

To harness the full potential of AI while mitigating legal risks, businesses must adopt a proactive approach, and in this respect legal expertise is indispensable. Collaborations between legal professionals and AI experts are essential to navigate the complex legal terrain and unlock the full potential of AI while ensuring ethical and legal compliance.

As AI continues to evolve, businesses that embrace it responsibly and proactively to address legal considerations will be better positioned to thrive in the digital age, reaping the rewards of innovation while safeguarding against potential legal pitfalls.

About Amy Cowan – Amy has broad experience in property law, with a focus on subdivisions, property developments and commercial and residential conveyancing. She is a Conveyancing Practitioner and Registered Legal Executive and has extensive experience advising on Lending and Regulated Financial Services, and has provided high level advice to lenders, borrowers, and guarantors in all types of commercial and private transactions. Amy also serves as an Executive Board Member for the NZ Society of Conveyancers, a member of the Standards Committee, and an associate member of the NZ Law Society. Ph: 06 872 8210
Email: amy@bramwellbate.co.nz

Protecting Your Assets – Why Legal Advice Matters for ‘Pre-Nup’ Agreements

A recent decision in the Napier High Court, WL v AJ [2023] NZHC 703, is a timely reminder that seeking independent legal advice is crucial for a pre-nuptial agreement (pre- nup) to be valid and enforceable. The decision also demonstrates the consequences of not getting the right advice.

Understanding the Case

Let’s take a look at the case involving Mr W and Ms A.

They began their relationship in 2000, and on 3 July 2001, Mr W bought a home using his personal savings and registered it in his sole name. Mr W and Ms A moved into the home. However, due to issues in their relationship, Mr W wanted to protect his interest in the home. Mr W sought initial advice from a lawyer who explained that under the Property
(Relationships) Act 1976 (PRA), the home could be considered the “family home” since it was Mr W and Ms A’s main residence. If their relationship lasted for three years or more, Ms A could claim a half share of the equity in the home, despite the home being in Mr W’s name and Ms A not contributing financially to it. Mr W was told that the only way to prevent Ms A’s claim was to sign a pre-nup stating that the home was Mr W’s separate property. However, Mr W didn’t seek further legal advice or ask his lawyer to prepare a pre-nup. Instead, Mr W’s sister, who was studying as a legal secretary, drafted up a pre-nup.

Ms A briefly consulted the Community Law Centre over a phone call about the pre-nup. Eventually, both Mr W and Ms A signed the pre-nup with their family members as witnesses. In 2017, Mr W and Ms A separated. Mr W argued that the pre-nup was valid and enforceable, protecting the home as his separate property. On the other hand, Ms A claimed that the pre-nup was invalid and that she was entitled to a half share of all relationship property, including the home.

Outcome

Justice Mallon presided over the case. Justice Mallon pointed out that Ms A only received brief legal advice regarding the pre-nup over the phone. Justice Mallon believed that if Ms A had received detailed legal advice about the pre-nup’s effects and implications, she might not have signed it. Justice Mallon also noted that Mr W hadn’t received any legal advice on the pre-nup since it was prepared by his sister after he stopped consulting his lawyer. Moreover, the pre-nup was witnessed by family members instead of each party’s lawyer, as required by the PRA. Justice Mallon referred to a leading case on the necessity of independent legal advice and concluded that the advice received was insufficient, rendering the entire pre-nup invalid. Consequently, the PRA applied, and since Mr W and Ms A’s relationship had exceeded three years, Ms A was entitled to a half share of all relationship property, including the home.

Do You Need a Pre-Nup?

For a pre-nup to be valid, it must be in writing, signed by both parties and their lawyers, and each party must receive comprehensive legal advice. Without a properly executed pre-nup, your partner could disregard earlier understandings or verbal agreements about property and insist on their strict legal rights, just like in the WL v AJ case. This could leave you with much less property than you anticipated in the event of a separation. Even if you don’t separate from your partner, it’s essential to remember that the PRA can still apply upon your death. By having a pre-nup, you can specify how your property will be handled in the event of separation or death, providing certainty, and achieving your desired estate planning outcomes.

It’s not too late to get something drafted; you can execute one at any stage before separation. Protect your assets by reaching out
to Alex at Bramwell Bate Lawyers for assistance with pre-nup agreements or other relationship property issues.

Alex Fanning joined the team at Bramwell Bate this year and brings seven years’ experience in family law and relationship property. Following graduation from Otago University, Alex joined Oranga Tamariki in Dunedin. He relocated to the North Island and has spent time working at a mid-sized regional firm and a large national firm specialising in resolving complex relationship property disputes. Alex is an experienced litigator and can assist with resolution of a wide range of family law issues, whether by agreement or via an application to the Family Court. Email: alex@bramwellbate.co.nz Phone: 06 872 8210

Cyclone Gabrielle & tenancies – know your rights

Article by Edward Bostock, Director and Kelly Henderson, Legal Executive 

One of the most significant impacts of Cyclone Gabrielle has been the damage and destruction to commercial and residential properties in Hawke’s Bay. Building officers are completing rapid building assessments on properties effected by the Cyclone.

To date, there are 100 red stickered properties (meaning the property has been seriously damaged) and 712 yellow stickered properties (meaning the property has been damaged and may need to be temporarily vacated) in the Hastings District. Understanding what rights landlords and tenants have if their property is affected is important. Commercial Leases What does “untenantable” mean?

The term “untenantable” is generally accepted to mean that a leased property has become so badly damaged or destroyed it can no longer be occupied or used by a tenant for the purpose intended in the lease. To determine whether a property is ”untenantable” the following points should be considered:

■ How permanent the damage is;

■ How long any repairs will take;

■ Whether the damage or destruction prevents the tenant from their right to use, enjoy and operate the property; and

■ What proportion of the term of the lease the property will be unusable for.

What does the Deed of Lease say? Landlords and tenants should look to the Deed of Lease as a guide for how  to proceed when a property has been destroyed or damaged by an event such as Cyclone Gabrielle. Leases will generally contain clauses differentiating between properties that have been completely destroyed and those that have been partially damaged or destroyed. The ADLS Deed of Lease is commonly used for commercial leases and (subject to specific changes) this provides as follows:

1. Total Destruction
If the property or any portion of the property is so badly damaged or destroyed so as to render the property as untenantable then the term of the lease will automatically terminate from the date of destruction or damage. The tenancy may also be terminated if the landlord, acting reasonably, decides that the property is so badly damaged it requires demolition or reconstruction.

2. Partial Destruction
If the property or any portion of the property is damaged, but the property is not untenantable then the expectation is that the landlord will spend all insurance money received to reinstate the property. There are a number of points to note with this:

■ The landlord is not required to spend any amount of money greater than the insurance money received.

■ The landlord may carry out the repairs or reinstatement and use any materials and form of construction they see fit as long as the property is reasonably adequate for the tenant’s occupation and use of the property.

■ Until the repairs or reinstatement are complete, a fair proportion of the rent and outgoings shall cease to be payable from the date of destruction or damage.

■ If a necessary permit or consent (such as resource or building consents) is unable to be obtained, or the insurance money received is inadequate for the repairs or reinstatement required, then the term of the lease will automatically be terminated.

Not all commercial leases use the ADLS Deed of Lease and there are situations where there are no written lease arrangements at all. Residential Tenancies Section 59 of the Residential Tenancies Act 1986 deals with properties that have been damaged or destroyed due to a natural disaster and as with commercial tenancies, the requirements differ depending on the severity of the damage.

The property has been destroyed If your residential property has been destroyed or the damage is so severe that it can no longer be lived in, then either the tenant or the landlord can give notice to terminate the tenancy regardless of whether the tenancy is fixed term or periodic. In this case, the landlord must give seven days’ notice to a tenant, or a tenant must give two days’ notice. During this notice period the rent should be reduced accordingly. The property has been damaged If part of your residential property has been destroyed or damaged so that part can no longer be lived in, then the rent payable should be reduced accordingly. Either party can apply to the Tenancy Tribunal to terminate the tenancy.

The Tenancy Tribunal will make an order to end the tenancy if it is deemed unreasonable for the landlord to reinstate the property or for the tenant to continue with the tenancy even at a reduced rent.

We understand that this may be a stressful time for landlords and tenants alike. If your commercial or residential property has been destroyed or damaged and you are unsure what your rights are then please give our office a call – we are here to help. Contact: edward@bramwellbate.co.nz or kelly@bramwellbate.co.nz (06) 872 8210 www.bramwellbate.co.nz

Honey, I Shrunk the Equity!

Reflecting on the past year and considering what’s to come in 2023.

How do we summarise the New Zealand property market in 2022? “Contrast” comes to mind. “Against the grain” might be another appropriate phrase. It was an exceptionally intriguing year for New Zealand’s property market.

Professionals at all levels of the sale and purchase of property recognised a significant shift in what had previously been a “sellers’ market” and as we head into 2023 it leaves much room for reflection. Although unrest was to be expected, given the noise of inflation post-pandemic, the nature of last year’s property market has brought about much to consider in the new year. Late 2022 saw a decline of house prices at about 4.5% nationally, leaving many surprised by the remarkably uniform decrease of housing prices from their peak in late 2021.

House prices in Wellington decreased by a whopping 11.7% from October 2021 to October 2022. In Auckland, the decrease in house prices peaked at 4.7% in October 2022 compared to the year prior. Decisions of the Reserve Bank continued to encourage the swelling of interest rates on mortgages, meaning property supply continued to weaken, and prices dropped.

The conveyancing sector finished the year on an unsure footing affecting all Kiwis on the property ladder. Scratching heads we ask: “What might the property sector hold for 2023?” The general echo was economists’ hypothesising that prices will continue to drop until the end of 2023. Furthermore, we have been warned to expect further increases to interest rates, with some suggesting we should be prepared to see fixed interest rates as high as 9% in 2023.

The uncertainty of a tightening property market appears content on following us through 2023. But like a wheel turning, the cyclic nature of the market means a decline in property prices will, at some point, move towards stability. Whether we can expect this in 2023 is uncertain. The market is influenced by various of internal and external factors, and therefore, any relief emerging through the year must be anticipated patiently. But it’s not all bad. We have recently seen some great initiatives introduced which have opened opportunities for one particular area of the market: first home buyers.

Of note are new strategies targeted at mitigating barriers to the purchase of a first home. One example is the initiatives of Kāinga Ora. Various innovative pathways have been created to encourage both families and individuals to join the property ladder. Of particular significance, Kāinga Ora is aiming to tackle one of the greatest obstacles for first home buyers – the dreaded deposit – by lowering the market expected 20% to a far more palatable 5%.

Whether it be the First Home Grant, First Home Loan or First Home Partner Scheme, Kāinga Ora is providing greater opportunities to take advantage of a decline in house prices. Couple these initiatives of Kāinga Ora with the increasing slowdown of vendors to the market, and 2023 may be one of the stronger years for first home buyers to get their hands on those first set of keys.

The value-to-income ratio continues to climb post-pandemic, meaning that first home buyers should feel more confident in their ability to find their first home. Kāinga Ora pathways are still relatively under-utilised, with much to be learnt among professionals and potential home buyers alike. However, innovative strategies like these bring about an optimism that more Kiwis may be able to achieve their goals and become homeowners this year. We look forward to continuing to provide conveyancing support to existing and new clients throughout Hawke’s Bay during 2023, and are excited by the opportunity to help more first home buyers achieve their goals through the strange but inviting nature of our current market.

Korero in the Workplace: The Importance of Mental Wellbeing as a Business Asset

Mental Health Awareness Week runs from 26 September to 2 October 2022.

In 2021, the theme of Awareness Week was “take time to kōrero”, which encouraged connection through conversation, and promoted openness about our mental wellbeing.

For employers and employees, it’s important to understand that mental health plays a significant role in the workplace. For businesses, the mental wellbeing of their teams is a great asset. Research shows that businesses who invest in the mental health of their staff reap the benefits of increased productivity and overall business efficiency. But mental health is tricky to isolate. Almost half of all New Zealanders will be categorised as struggling with a mental illness at some stage in their lives, and what is considered as encouraging of mental wellbeing is different for everyone. Setting rigid guidelines in the workplace may not be as effective as fostering a supportive work environment overall – one which encourages employees to kōrero openly about their mental health. Encouraging mental wellbeing is not just a sentiment – it is the law.

The focus on mental wellbeing continues to improve in New Zealand’s legislation, with a variety of statutes designed to facilitate the improvement of mental wellbeing in the workplace.

Some examples include:

■ The New Zealand Bill of Rights Act 1990;

■ The Privacy Act 1993; and

■ The Employment Relations Act 2000.

A significant example of fostering mental health in employment law includes the Human Rights Act 1993, which creates an obligation for employers to meet the needs of employees who struggle with disability. These are called “workplace accommodations” and can be useful for employees who may have ideas about how businesses can better accommodate mental wellbeing. Another example is the duty of care which obligates employers to protect, as far as reasonably practicable, the health and safety of their workers under the Health and Safety at Work Act 2015. “Health” in this context is defined as both physical and mental health. Finally, under the ordinary legal rules of sick leave, employees are entitled to use their annual sick leave for mental wellbeing purposes.

The regime for mental health sick leave operates exactly as it would for any other kind of sick leave from the workplace. For example, should an employee opt to take three consecutive days of sick leave for mental health, the employer is entitled to request a doctor’s certificate in support.

So how can a business go about using mental wellbeing as a valuable tool for their company? The Mental Health Foundation provides great resources for businesses wanting to promote mental wellbeing in the workplace. The most consistent theme is that employers and employees are in communication with one another. “Connect”, “give” and “take notice” are among some of the core themes encouraged by the Foundation.

Another key theme in research around workplace mental prosperity is flexibility. For example, the Employment Relations Act 2000 includes the right to request flexible working arrangements, which may be useful when assisting an employee to shape their workday in a way that encourages their mental health. There is also great information available for workplace mental health standards at employment.govt.nz.

Employers are best to keep in mind that sometimes it is the smallest gestures that make a big difference for the team. It might just be where a team member’s desk is located or the fact they lack clarity on part of their role, maybe they want to start a little earlier in the day so they can get off earlier in the afternoon to pick up the kids. Be creative and be ready to talk.

Bramwell Bate looks forward to celebrating mental wellbeing not just in September but throughout the year. Collectively, we recognise the value of mental wellbeing as an asset of our firm, and we encourage our clients and our colleagues to consider how you may be able to promote mental wellbeing in your lives and businesses. Our employment team – Christine Symes and Tayla Westman – are happy to help and provide advice on flexible working agreements, ensuring your sick leave and family violence leave policies are up to date and fit for purpose, and that you have policies in place for data protection and privacy when team members are working remotely.

Understand legislation changes to land before acting

A hot topic for many years has been the house market. Specifically, how the Government has attempted to create affordable housing for those priced out of the market. The most recent of these is the National Policy Statement on Urban Development 2020 and the proposed repeal and replacement of the Resource Management Act. Hastings and Napier District Councils will be required to review their existing District Plans to determine where and how they can support future housing growth within their regions. Potential changes may provide you with various options for the development of your land which may have been unavailable to you previously. But before rushing out to take advantage of the current market, there are a few matters for you to consider first.

Tax – that old chestnut

There are several possible tax implications when it comes to developing property. The most important consideration is the intent at the time of purchase. Any profits gained from the sale of land that was purchased with the intention to develop and sell will be taxable. Inland Revenue has wide ranging powers to determine the original intent and purpose.

Where a property is bought and sold within 10 years, the development will be subject to tax when the work undertaken is considered ‘more than minor’. Various factors including the time, effort and expense that has occurred in undertaking the development will be considered.

Where property is owned for more than 10 years and then developed, any development will be taxed where there have been significant costs incurred for earthworks, drainage and connection of utilities like power, water and telecommunications.

There is also provision applying to the sale of property within 10 years where the property has been rezoned pursuant to the Resource Management Act. Then there is the overriding bright-line test. This provides for any residential or lifestyle property sold within 10 years to be taxed upon sale, regardless of the original intention when purchased. For properties purchased prior to 27 March 2021, the timeframe is five years.

Land Covenants and how they affect your plans

Land Covenants are agreements that outline resections on how land can be used or developed, the objective being to maintain the quality of a subdivision and the value of the properties within it. Land Covenants are recorded on the Record of Title and pass onto all future landowners. Examples include restrictions on the design of the house, materials that may be used and ongoing maintenance requirements.

One covenant that needs careful review is any clause that may prevent further subdivision. No further subdivision clauses can come in two types – there is the express ‘no further subdivision’ clause and then there are limitations on the number of buildings that may be erected within a defined area.

Land Covenants are private agreements which, provided they do not contravene any local council bylaws, will trump any Council zone definitions for minimum lot size. Councils are

not required to consider any existing private Land Covenants noted on a Record of Title when reviewing any subdivision applications. There have been instances where Councils have issued a Resource Consent allowing a subdivision to proceed, but the owner of the land has been unable to legally subdivide the property due to a no further subdivision clause contained in existing Land Covenants.

Removal of redundant easements

During the planning stage, the removal of redundant easements can have a significant effect in lessening costs and reducing timeframes.

An easement is a right from one landowner to another to use a specified area of land in a specified way. These are generally in the form of rights of way, rights to convey water, electricity, telecommunications, and rights to drain water or sewage.

When a new title is issued, all existing interests on the old title ‘drop down’ onto all new titles. The effect that this sometimes has is that easements are registered over land that has no direct access to the easement area or the right to use the same. This can create issues when it comes to selling the new titles. The most cost and time efficient solution is to ensure all easements are only brought down or registered over the relevant land to be affected. This may require some easements to be fully or partially surrendered as part of the subdivision process.

In other cases, your existing title may already have redundant easements from an earlier subdivision that should really be removed to ‘tidy up’ the title first. Some of the points outlined above may appear complicated and confusing. We are here to help you with all of this and reduce any concerns you may have to ensure you get the most out of your investments and development. Give me a call and I’ll be happy to discuss.

Who’s responsible/ The uncertainty of business liability when a cyber attack strikes

As technology continues to dominate everyday activity, the risk of cyber-attacks occurring also increases. Businesses, irrespective of their size, are becoming more vulnerable to the menace of cyber-attacks. Ransomware, malware, and broad sweeping data breaches are only a handful of the growing categories of cyber-attacks prevalent in today’s market.

As the threat rises, questions of business liability because of an attack on client data remain unanswered. However, the responsibility to protect client data falls on the business itself. But how can that be? Do we not consider the exploitation of the business itself as the victim of the unlawful act of an internet stranger? Unfortunately, this may not be the case and businesses can be left exposed to the possibility of being held liable in law.   

The vigorous pace in which cyber-attacks have matured means that the law of business liability in this area remains unclear. How might New Zealand businesses be held liable in law when a cyber-attack strikes?

The cyber-attack on the Waikato District Health Board (DHB) in May of this year provides some insight. The malware attack on the DHB’s IT system saw the publishing of confidential patient information on the dark web, including bank details and passports. Privacy Commissioner John Edwards explained that the DHB may be at risk of claims against it if patients could establish harm resulting from the breach.

In his statement, Edwards confirmed that the responsibility of mitigating the harm of cyber-attacks on patient information fell on the DHB, explaining that an onus fell on the DHB to secure the data and communicate the privacy breach with the victims of the attack. In labelling the patients of this attack as “victims”, Edwards highlighted the seriousness of cyber security breaches.

The liability alluded to by the Privacy Commissioner is that of negligence. Businesses owe duty of care to their clients that their information will be securely held, and liability can arise when clients become the victims of cybersecurity breaches.

For businesses, preparation is everything. To ensure you are protected from the possibility of breaching your duty of care owed to your clients, preventative action needs to be taken to mitigate business liability.

One option available to businesses is inserting effective exclusionary clauses in your terms of trade. An exclusionary clause operates to protect businesses by excluding liability in the instance of a situation ordinarily considered a breach, and the clause should afford the business some protection against claims of liability in the event of a cyber-attack.

What constitutes a valid exclusionary clause is governed by the Contract and Commercial Law Act 2017, the Credit Contracts and Consumer Finance Act 2003 and the discretion of Judges in court proceedings. For businesses who have already entered contracts with clients, exclusionary clauses may still be incorporated, however, an incorporated exclusionary clause must comply with the rules prescribed in law. It is therefore critical that in drafting exclusionary clauses businesses seek expert legal advice.

The rapid expansion of technology has brought many positive impacts on businesses with it. However, as cyber-attacks continue to increase in our developing technological environments, business data becomes increasingly susceptible to exploitation. Now is the time to take preventative action and protect businesses from the uncertain liability that may attach to the offending of another.

Return of the Brains trust

If there is a silver lining when talking about the global COVID-19 pandemic, it has to be the return to our shores of thousands of highly skilled Kiwis.

For years, New Zealand has been a casualty of what has been termed ‘brain drain’, as highly qualified New Zealanders left in search of opportunities aboard.

Recent figures show that over 50,000 expats have already returned home, with predictions that as many as 500,000 are likely to make their way over the next few years.

What will returning Kiwis encounter on their return to the homeland?

One of the first issues of reverse migration, is likely to be a period in managed isolation and quarantine facilities and the associated cost. Legislation has been passed to enable the Government to recover some of the costs of managed isolation and quarantine facilities for those returning to New Zealand. The COVID-19 Public Health Response and Amendment Bill provides a legal framework to allow the Government to set payment terms, exempt groups of people and waive charges in cases of financial hardship. New Zealand citizens, permanent residents and temporary entry class visa holders are all sharing the costs in varying degrees.

When returning Kiwis finally find freedom on the other side of MIQ, what will the landscape look like?

This population of people are bringing with them advanced skills and networks obtained through their international experiences and New Zealand needs to ensure that these benefits and experiences are shared and captured to enhance the local economy.

While some will have the flexibility to work remotely for international employers, many will be seeking work within the domestic job market. They will benefit from the recently signalled employment law changes which aim to improve employees’ entitlements, increase the minimum wage and sick leave entitlements.

While a considerable number may settle in Auckland, the provinces will benefit too. The purpose of a recent survey carried out by Kiwi Expat Association (KEA) was to better understand offshore Kiwis and their intentions, such as their timeframes to return home, skills, industry experience and wealth, as well as their needs upon return.

The survey indicated that while 32% of returnees intend to reside in Auckland, the remainder are looking to return to the regions, with 22% leaning towards somewhere they may not have lived before.

The big question – what does this mean for our housing market, which is already under the spotlight given recent changes to the Residential Tenancies Act, increasing housing prices and new tax rules in the past year?

While there is continued pressure on the housing market, the effect of the legislative changes announced in March 2021 by the Labour Government are likely to flow through. These changes are intended to make the property market fairer for first home buyers and to take out some of the ‘heat’ from the market. The changes include an extension of the Bright Line Test which sees tax paid on any capital gains made if an investment property is sold within a set period. The extension of the bright-line test from five to ten years will effectively see a longer lock-in period for property investors and is intended to slow down property sales.

Another change was the removal of interest rate deductibility from investor housing. Proposed to begin in October this year, deductibility on mortgage interest will be reduced by 25% increments for existing property investments and will be fully phased out by April 2025. This policy will generate a significant amount of additional tax to be paid by property investors and will weigh on cashflows and potentially impact decision making.

While the true effect of these recent changes to is yet to be seen, returning Kiwis can be sure that the Government is focused on improving the supply of housing to the market. This is also the intention with the recent review of the Resource Management Act.

While it may not be a smooth home coming for all, many Kiwis will simply be grateful to return to a country which has been largely unaffected by a global pandemic. And for us who are already here, we should see the influx of those returning home as an opportunity for growth and connection.

AUTHOR: Christine Symes is a director at Bramwell Bate and provides advice on a range of matters including property, company and commercial, trusts and estates, and Wills and Power of Attorneys.

christine@bramwellbate.co.nz

Employers need to balance growth with volatility from COVID-19

No doubt we are all spending a lot of time considering what sort of year 2021 will be. New Zealand has been very fortunate compared to the rest of the world, however, there are still plenty of challenges we are facing particularly for those in certain industries such as tourism and events, most recently highlighted by the cancellation of the Art Deco Festival due to the recent change in alert levels.

Confidence in the local economy appears strong although it is hard to predict if this will continue and how any changes will impact the workforce and its well-being. For example, businesses may be wishing to increase their workforce to cope with current workloads while trying to balance this with not being over-committed given the potential changes to alert levels throughout the year and the resulting impact on both the local and national economy.

While we are all navigating this together, we must also be aware and informed of the employment law changes the Government has signalled for the coming 12 months. The Government has made a commitment to focus on our workers and will look to introduce changes to better support them.

These changes include:

  • a confirmed minimum wage increase effective on 1 April 2021 from $18.90 to $20.00 per
  • proposed increase to sick leave entitlements from five to ten days every 12 months which looks likely to apply to both full and part time employees, but will not increase
  • making it easier for women to gain pay
  • plans to strengthen and simplify the Holidays
  • Te Rā o Matariki confirmed as a public holiday from

Employers must be conversant with the changes already confirmed, and those that are planned, and be ready to implement them while also navigating the uncertainty from COVID-19.

  • What is clear is that working arrangements have (and no doubt will continue) to change for some For example, in the professional services sector (such as lawyers and accountants) there is a greater focus on flexible working which includes working a different number of hours, e.g. part-time.
  • working within different time frames, g. starting and finishing early.
  • working
  • job-sharing.
  • purchasing additional annual
  • taking additional unpaid annual

These flexible working arrangements are known to have benefits for employees, such as:

  • the ability to meet family needs and responsibilities.
  • reducing the chance of burnout
  • increased job satisfaction.

Under part 6AA of the Employment Relations Act 2000, all employees have the right to request a variation of their working arrangements at any time. Employers have an obligation to respond to requests as soon as possible and not later than one month after receiving the employee’s request.

There is a limited but broad number of reasons employers can decline a request for a variation to working arrangements, such as an inability to recruit additional staff or to reorganise work.

Employers should consider a number of factors when an employee requests flexible working arrangements and it is important to ensure that transparent processes are put in place for the benefit of both the employer and the employee. Employers must also be aware that no matter when or where an employee works, ensuring their health and safety is a shared responsibility. For example, if an employee will be working remotely, they are responsible for organising a work area that is appropriately set up to ensure that they can work safely, and an employer may request an employee provide photos of their work location. An employer may also request a health and safety assessment of the workstation to ensure that the employer’s health and safety obligations are being met.

Businesses will no doubt continue to adapt to the ever- changing landscape presented by COVID-19 and those that chose to embrace flexible working for their employees may end up with a stronger and more committed workforce. That said, we suspect that there will be many twists and turns to come throughout 2021.